Should You Think About Buying Axon Enterprise, Inc. (NASDAQ:AXON) Now?

Let's talk about the popular Axon Enterprise, Inc. (NASDAQ:AXON). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Axon Enterprise’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Axon Enterprise

What's The Opportunity In Axon Enterprise?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 18% below my intrinsic value, which means if you buy Axon Enterprise today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $289.60, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Axon Enterprise’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Axon Enterprise?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Axon Enterprise's earnings over the next few years are expected to increase by 86%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? AXON’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on AXON, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Axon Enterprise at this point in time. You'd be interested to know, that we found 2 warning signs for Axon Enterprise and you'll want to know about them.

If you are no longer interested in Axon Enterprise, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.